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Aug 14, 2017

Washington Healthcare Update

This Week: Congress in recess but the HHS OIG, HRSA and the FDA continue to make announcements.

Because Congress will be out for August recess, the next newsletter will be August 28. Happy August !

1. Congress


2. Administration

3. Regulations Open for Comment

1. Congress


Senate Democrats Urge CMS to Drop Rule Concerning SNFs and Arbitration

Thirty-one Democratic senators have written CMS Administrator Seema Verma urging her to drop a proposed rule that would require prospective patients of federally funded nursing homes to sign an arbitration agreement as a condition to being admitted. The agreements prohibit patients or their families from taking facilities to court, requiring them to instead appeal to an arbitration tribunal. Critics say many residents are not aware they signed away their right to sue until they actually try to file charges.

“Forced arbitration clauses… prevent many of our country’s most vulnerable individuals from seeking justice in a court of law, and instead funnel all types of legal claims, no matter how egregious, into a privatized dispute resolution system that is often biased toward the nursing home,” the senators, led by Sens. Al Franken (D-MN) and Ron Wyden (D-OR), wrote on Aug. 7.

Last October, the Obama administration banned any nursing home that receives federal dollars from requiring prospective tenants to sign an arbitration agreement.

To read the full letter, click here.

Senate Democrats Express Frustration Over Tobacco Deeming Rule

On Aug. 4, thirteen Senate Democrats sent a letter to FDA Commissioner Scott Gottlieb, chastising him for his decision to further delay the tobacco deeming rule and expressing concern that FDA may consider rolling back its regulation of premium cigars. The senators say that by delaying the rule, which extends FDA’s regulatory authority to cigars and electronic nicotine delivery systems (ENDS), “FDA is failing in its commitment to safeguard public health, especially for children.”

The letter was led by Sens. Patty Murray (D-WA), Jeff Merkley (D-OR) and Dick Durbin (D-IL) and raises criticism similar to those raised by advocacy groups, arguing that delaying implementation of the deeming rule gives “e-cigarettes and cigar manufacturers—including flavored products—a free pass to stay on the market for years with minimal oversight and restrictions. This is a step backwards and contradicts years of data demonstrating the danger these products pose to public health,” the letter says.

The Democratic senators also point out that delaying the deeming rule will allow flavored products to stay on the market until 2022. The lawmakers argue that FDA already has enough evidence to prohibit flavored tobacco.

However, some members of Congress encouraged Gottlieb to further delay the rule. House appropriators on May 25 asked Gottlieb to further delay enforcement of the rule, with Rep. Kevin Yoder (R-KS) saying that the Tobacco Control Act (TCA) has had certain effects on the e-cigarette and vaping industry that Congress did not intend when it passed the TCA.

To read the letter, click here.

2. Administration

FDA to Increase Staff Inspecting International Mail

In a speech, FDA Commissioner Scott Gottlieb said the FDA will increase staff at international mail facilities from 8 to 22 and double the number of port agents assisting its Office of Criminal Investigations. Gottlieb will also add more laboratory analysts, may see “some additional limited resources and authorities from Congress” and promised a full work plan on the matter in the next month. The purpose of the increased staff is to stop illegal drugs like synthetic opioids and fentanyl from entering the United States.

To read the full speech, click here.

HHS OIG to Review Telehealth Medicare Reimbursement

HHS Office of Inspector General recently announced its first review of Medicare payments for telehealth services. Telehealth services amounted to only $17.6 million in Medicare reimbursement in 2015, but due to strict regulations surrounding telemedicine, the OIG could discover the misuse of those services.

Medicare only covers telehealth in federally defined rural health professional shortage areas; only eight types of practitioners may deliver telehealth services to Medicare beneficiaries from a qualified distant site; and CMS publishes a limited number of reimbursement codes for these services. Medicare beneficiaries are required to use an “interactive 2-way telecommunications system (with real time audio and video)” and must receive telehealth services at an official originating site. Doctors can’t be reimbursed by Medicare for telehealth services if requirements aren’t met.

The Inspector General’s review will focus on claims for telehealth services provided at distant sites that do not match up with claims from an originating site and intends to look into whether or not providers are submitting telehealth claims that don’t follow current reimbursement rules.

In a 2016 report to Congress, the Medicare Payment Advisory Commission (MedPAC) found that among the 175,000 Medicare telehealth claims from distant sites in 2014, 55 percent were without a corresponding originating site claim. MedPAC determined that this discrepancy “could be due to providers not bothering to bill for the $25 facility fee, or it could be that some services inappropriately originated from a patient’s home.”

Although there are at least four different pieces of legislation that could expand Medicare coverage of telehealth services currently pending on Capitol Hill, Congressional Budget Office scoring and concerns about cost could hold back such legislation. Many Medicaid programs include telehealth coverage and 34 of 50 states require telehealth parity under private insurance.

If the OIG finds significant evidence of improper claims, those findings could significantly impact telemedicine reimbursement and potential expansion of telemedicine.

To view the announcement by the HHS OIG, click here.

HRSA Transitions to New 340B Registration System

On Aug. 9, the Health Resources and Services Administration (HRSA) announced a temporary closure of the 340B Office of Pharmacy Affairs Information System (OPAIS) from Aug. 15 until the middle of September as the office transitions to a new registration system. Previously, Krista Pedley, director of HRSA’s Office of Pharmacy Affairs, said the new system will include a 340B price ceiling verification system. HRSA is required to provide ceiling prices “as calculated and verified by the Secretary” for hospitals and those who receive the 340B drug discounts that HRSA protect “privileged pricing data” as a part of the ACA.

As a part of the HRSA’s FY 2019 budget request, the House Appropriations Committee FY 2018 HHS report asked for an update on the system regarding concerns with ceiling prices.

3. Regulations Open for Comment

CMS Proposes MACRA Rule

On June 19, CMS issued a proposed rule that would make changes in the second year of the Quality Payment Program as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

The 1,058-page rule continues the “pick-your-pace” option in year two of the program, letting doctors report a limited amount of quality data to be exempted from Medicare’s penalties.

CMS creates a “virtual group” reporting option, allowing doctors to pool the information on how they care for patients and be subjected to Medicare’s quality payment scheme.

CMS is also increasing the minimum number of patients doctors can treat before being subject to the program’s Merit-based Incentive Payment System. It establishes more flexibility for doctors who see limited numbers of patients face to face or in a hospital. For 2017, roughly 800,000 clinicians were exempt from the MIPS program.

CMS will not require doctors to use 2015 certified EHRs next year, as it had ordered during the Obama administration. However, clinicians are offered bonuses for using new versions of the software. Medicare also will delay for another year judging doctors for how much they spend for treating patients.

Comments on the rule are due no later than 5 p.m. on Aug. 21, 2017. For a fact sheet on the proposed rule, click here.

CMS Proposes 2018 Policy and Payment Rate Changes for End-Stage Renal Disease Facilities

On June 29, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update payment policies for the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS). The rule covers payment rates for renal dialysis services, including updates to acute kidney injury (AKI), furnished to beneficiaries on or after Jan. 1, 2018.

The ESRD Quality Incentive Program (QIP) proposed changes are for payment years 2019, 2020 and 2021, and a number of key dialysis data methodologies and quality measures. The proposed rule also requests comment on how to include individuals with acute kidney injury in the ESRD Quality Improvement Program.

In addition to the proposed rule, CMS is releasing a request for information to welcome continued feedback on the Medicare program. CMS is committed to maintaining flexibility and efficiency throughout Medicare. Through transparency, flexibility, program simplification and innovation, CMS aims to transform the Medicare program and promote the availability of high-value and efficiently provided care for its beneficiaries.

Comments are due no later than 5 p.m. on Aug. 28, 2017.

For a fact sheet on the proposed rule, please click here.

For the ESRD proposed rule (CMS 1674-P), please click here.

CMS Proposes 2018 Policy and Rate Changes for Hospital Outpatient, Ambulatory Surgical Center Payment Systems

The Centers for Medicare & Medicaid Services (CMS) on July 13, issued a proposed rule that updates payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System.

Among the provisions in this rule, CMS is proposing to change the payment rate for certain Medicare Part B drugs purchased by hospitals through the 340B program. The proposed rule also requests comment on how CMS can best implement the proposal to pass savings on to beneficiaries and providers, and to allow seniors to save money on their drug costs. The 340B Drug Pricing Program allows certain hospitals and other health care providers to purchase drugs and biologicals (other than vaccines) that are administered in a hospital outpatient department from drug manufacturers at discounted prices.

The proposed rule also includes a provision to address rural hospitals recruiting physicians by placing a two-year moratorium on the direct supervision requirement currently in place at rural hospitals and critical access hospitals.

In addition, CMS is releasing within the proposed rule a request for information to welcome continued feedback on flexibilities and efficiencies in the Medicare program.

Comments are due 5 p.m. Sept. 11, 2017.

To view a fact sheet on the proposed rule, click here.

To view the proposed rule, click here.

CMS Proposes 2018 Payment and Policy Updates for the Physician Fee Schedule

The Centers for Medicare & Medicaid Services (CMS) on July 13 issued a proposed rule that would update Medicare payment and policies for doctors and other clinicians who treat Medicare patients in calendar year (CY) 2018. This proposed rule seeks public comment on reducing administrative burdens for providing patient care, including visits, care management and telehealth services. The rule takes steps to better align incentives and provide clinicians with a smoother transition to the new Merit-based Incentive Payment System under the Quality Payment Program (QPP). The rule also attempts to encourage fairer competition between hospitals and physician practices by promoting greater payment alignment, and it would improve the payment for office-based behavioral health services that are often the therapy and counseling services used to treat opioid addiction and other substance use disorders. In addition, the proposed rule makes additional proposals to implement the Center for Medicare & Medicaid Innovation’s Medicare Diabetes Prevention Program expanded model starting in 2018.

In addition to the proposed rule, CMS is releasing a request for information to welcome continued feedback on the Medicare program. CMS is committed to maintaining flexibility and efficiency throughout Medicare. Through transparency, flexibility, program simplification and innovation, CMS aims to transform the Medicare program and promote the availability of high-value and efficiently provided care for its beneficiaries. This will inform the discussion on future regulatory action related to the Physician Fee Schedule.

Comments are due by 5 p.m. on Sept. 11, 2017.

For a fact sheet on the proposed rule, click here.

To view the proposed rule, click here.

CMS Proposes 2018 and 2019 Payment Changes for Medicare Home Health Agencies

The Centers for Medicare & Medicaid Services (CMS) on July 25 issued a proposed rule that would update payment rates and the wage index for home health agencies (HHAs) serving Medicare beneficiaries in 2018; it also proposes a redesign of the payment system in 2019. Comments are due Sept. 25, 2017.

CMS is planning a slight pay cut for home health agencies in 2018, by reducing Medicare payments to the agencies by 0.4 percent next year, saving the federal government an estimated $80 million. That change is driven in part by CMS’s planned phase out of a provision boosting pay rates for certain home health services delivered to rural patients. The agency is also floating a series of changes to the payment methodology beginning in 2019, which could result in a pay cut of up to 4.3 percent. That would translate to as much as $950 million in reduced Medicare payments to home health agencies.

Under the proposed rule, the home health payment update percentage for HHAs that submit the required quality data for the Home Health Quality Reporting Program would be 1 percent in 2018. The proposed rule also includes proposals to refine the HH PPS case-mix adjustment methodology, including a change in the unit of payment from 60-day episodes of care to 30-day periods of care, to be implemented for periods of care beginning on or after Jan. 1, 2019. Additionally, the proposed rule includes proposals for the Home Health Value-Based Purchasing Model and the Home Health Quality Reporting Program.

To view the proposed rule, click here.

For more information on the Home Health Prospective Payment System, click here.

If you have any questions, contact the following individuals at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Anne Starke, Research Associate

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering infrastructure and economic development, strategic communications & grassroots, and government relations services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and has been named in The National Law Journal's special annual report, "The Influence 50," for the past several years. In the most recent report, McGuireWoods Consulting was ranked 15th of the 1,900 government relations firms in Washington, D.C.

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